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Australia's winter crop looks worse than initially predicted after the driest September on record and significant frost damage.

With harvests underway across most of the country, the latest forecast by the Australian government commodity forecaster ABARES puts crop production 20 per cent below the 20-year-average and the lowest since Australia's last drought in 2008-09.

The report, released this morning, has predicted a crop of 29.3 million tonnes, nearly 4 million tonnes less than the September forecast.

ABARES senior economist Peter Collins said crops deteriorated after Australia recorded its driest September on record, a critical month for crops because spring rains could provide major boosts to yields.

"Since September we've downgraded the forecast in just about every state except WA — in NSW there's been a downgrade of 19 per cent, Victoria 31 per cent and Queensland 12 per cent and South Australia 21 per cent," Mr Collins said.

"That's been because early in spring a lot of crops needed rain, that rain didn't come and it remained dry in some areas in October or it came too late."

Frost damage hurts farmers

The danger of frosts is also at its highest in September and significant frost events damaged crops in NSW, Victoria, South Australia and Western Australia.

High fodder prices and reduced crop prospects resulted in many farmers, who planted crops for grain production, opting to cut them early for hay.